Study pops collective balloons
The mainland's collective enterprises may appear plump and healthy, but are really like swollen bodies, bloated with excess water.
At least, that is the way the China Economic Times sees them, saying they are in far worse shape than they look and comparing them to sufferers of oedema, a condition where excess watery fluid gathers in the body's tissues or cavities.
The paper yesterday criticised them for low efficiency, confused management, hopeless accounting methods and unclear property rights.
The damning assessment followed an investigation by the Ministry of Finance which has just reviewed the health of 180,000 urban collective enterprises, which account for 30 per cent of all collectives.
The investigation exposed many problems, the paper said. The most serious is that these enterprises are deeply in debt and burdened by heavy losses. On average debts are equal to nearly 80 per cent of their book value.
It said that 140,000 industrial and commercial enterprises had combined assets of one trillion yuan (about HK$929.8 billion) and debt liability of 790 billion yuan.
Looking at the 35,000 collectively owned financial institutions, they had assets of 1.24 trillion yuan but owed 1.2 trillion.
The finance ministry also concluded that these collective enterprises are hiding 135.7 billion yuan of losses in their accounts.
